11. [Int Cap] Which of the following assets do not qualify for interest capitalization?

a. A new building that is under construction and intended for use by the company.

b. A new building that was purchased ready for use by the company.

c. A new building that a company is building and intends to sell for a profit.

12. When does the period of interest capitalization begin?

a. When expenditures for the asset have been made.

b. When activities that are necessary to get it ready for its intended use are in progress.

c. When interest cost is being incurred.

d. Only when all three of the above conditions are met.

13. [COGS] The Grievance Co. uses the periodic inventory procedure and provided the following information: Sales = $100,000; Beginning Inventory = $30,000; Accounts Receivable = $20,000; Ending Inventory = $40,000; Purchases = $90,000 Which of the following is the correct journal entry for recording COGS under the periodic procedure.

a. dr Merch Invty 30,000; dr. COGS 80,000; cr. Purchases 70,000; cr Merch. Invty 40,000

b. dr Merch Invty 40,000; dr. COGS 80,000; cr. Purchases 90,000; cr Merch. Invty 30,000

c. dr Merch Invty 40,000; dr Purchases 90,000; cr. Merch. Invty 30,000; cr COGS 100,000.

d. dr Purchases 90,000; cr. COGS 80,000; cr. Merch. Invty 10,000;